Today, I went to BestBuy with my 15 year old daughter to look for a digital camcorder. She wanted something that did HD and we found an interesting model for $149. I suggested that we go back home and read some customer reviews before buying it (plus, she had neglected to bring her money).

She did her research and in doing so, discovered that the camcorder was on sale for $99 on BestBuy’s website. I looked at the offer on the website to make sure it wasn’t a “web only” deal. It wasn’t. She started to order it online for in-store pickup but noticed that a photo id for the credit card holder would be required. She doesn’t have an id yet, so we jumped in the car and headed to the store.

At checkout, the camcorder rang up at $149. My daughter, who doesn’t like confrontation and doesn’t yet earn her own living, was more than happy to pay $149, but I was not. Moreover, as a 23 year veteran of the Consumer Electronics industry and someone who was familiar with BestBuy’s issue a while back regarding web/in-store pricing, I wanted to be sure that they honored the online price.

I told the cashier that it was $99 on the website. He started to point me to a makeshift kiosk that had been set up to allow customers to do on-line price checks, but then actually walked over to it himself and looked up the item on BestBuy’s website. Sure enough it was still $99. He did a price override and we completed the transaction.

BestBuy has receivedlotsofpraise for their innovative use of social media, both internally and externally. As someone keenly interested in retailers’ use of social media, I naturally follow them on Twitter. I am also very much a Customer Experience aficionado, so when I got home, I started an exchange on Twitter with Best Buy’s Chief Marketing Officer, Barry Judge.

As you can see, Mr. Judge’s first reply challenged the idea that prices should be the same. Now without taking a big detour into the intricacies of multi-channel pricing strategies, I’ll say that there are absolutely situations where prices can and should differ. Between physical markets (and sometimes stores in the same market) prices can vary based on the competitive environment. Between online and in-store for a chain like BestBuy, it gets a little more complicated. They have to compete with on-line pure plays (e.g. Amazon), but not cannibalize their physical stores, especially if their strategy is to have the two channels compliment each other. In this case, given that it was not a web-exclusive offer and their own price guarantee says they will match BestBuy.com, I replied that they prices should be the same. Otherwise, it can only lead to a bad customer experience like the frustration of finding that you should have received a lower price and having to drive back to the store for a refund.

I made a few other comments including pointing out that the cashier handled the situation well. When I suggested that customers don’t care about the different “value propositions” that Mr. Judge had cited earlier; that what matters to the customer is the experience they have, the “tone” of the conversation shifted dramatically.

When I told him that I was well versed in multi-channel retail complexities, I was shocked by his reply. Not wanting to assume a meaning, I asked him to clarify. At that point he abruptly ended the conversation.

Of course, that didn’t end the conversation. I posted a link to the exchange on Twitter and asked for people’s opinions and the replies and retweets have been coming at a steady pace. It used to be that if you shared a bad experience, 100 people would hear about it. In the world of social media, those numbers can increase exponentially (ask United Airlines). With that being one of the fundamental facts for companies to understand about social media, I was really surprised that the Chief Marketing Officer for BestBuy would engage with a customer former customer in this way.

What do you think? Was I being out of line? How could this conversation gone differently?

Maybe you should take a hammer to your iPod. OK, maybe not literally, but have you given any consideration to what the impact of the MP3 file (and Apples’s game changing iTunes business model) has been on the customer experience for recorded music? Steven Wilson, the driving force behind the band Porcupine Tree has given it a great deal of consideration. Wilson is clearly a minority in an industry transformed by technology and focused in selling three minutes of disposable entertainment at $.99 a pop. He sees the long form package as the best way to deliver a quality experience to the listener. Like legendary artists that came before digital, Wilson still produces limited edition, high quality vinyl collector’s pressings and “Digi-Pacs” that contain both stereo and 5.1 mixes contained in packaging which is in itself a work of art with pages of glossy artwork. Last month, Wilson released his first solo project to critical acclaim. Insurgentesis about music and the album as art form, and applying the same aesthetic vision through the writing, performance, production, artwork, lyrics, videos and beyond. It also reflects a theme which has been in Wilson’s most recent Porcupine Tree releases:

“My fear is that the current generation of kids who’re being born into this information revolution, growing up with the Internet, cell phones, iPods, this download culture, ‘American Idol,’ reality TV, prescription drugs, PlayStations – all of these things kind of distract people from what’s important about life, which is to develop a sense of curiosity about what’s out there.” (Steven Wilson, MTV News)

Later this year, Wilson and long-time film collaborator Lasse Hoile are expected to release a documentary film under the same title which looks into the issues of creating, packaging and marketing music in an era when iPods, Mp3’s and download culture are changing and eroding perceptions of exactly what an album is supposed to sound and look like. In an extract from the documentary included with the DVD-Audio package, Wilson laments the loss of the rock album as an art form.

As a teenager, he would go to the local record store with enough money to buy one album. He would explore the racks of titles and would make his decision on which one to buy based on, among other things, the look and feel of the cover artwork. Once the decision was made, he would spend hours exploring and absorbing his investment from the first track to the last (as it was meant to be heard).

As a teenager in the 1970’s, this really resonated with me. Think about a masterpiece like The Beatles’ Sgt Pepper. It was never meant to be consumed in three minute chunks, but rather as a whole 48 minute composition, while exploring the extensive imagery and lyrics of the album cover. A work of art like that could never deliver the same experience in digital download format with a single two inch square picture. Sadly, most modern artists have abandoned the album format as a result of the available technology.

Nevertheless, we are in a different time and the technology has forever changed the customer experience. Listening to Wilson describe why he does the things differently made me wonder if we haven’t seen a familiar phenomenon with other types of customer experiences. Have we made them superficial and disposable for the sake of technology and the need to do everything faster? More importantly, are there ways to succeed by playing the game differently like Steven Wilson does?

I worked on a customer experience strategy project for a large retailer a few years ago. One of the obvious insights gained from talking to customers was that they were (and still are) increasingly feeling starved for time. They want and expect everything to happen instantly. “Let me get in and out quickly” was the takeaway. This is a common insight used by companies developing their customer experience strategies. As a result, the approach many organizations have taken is to replace human interaction with technology. We self-serve everything from money to gasoline. It’s all very convenient, for the customer and cost efficient to the company, but does nothing to help build the brand by engaging customers through a smile, a greeting exchanged, a windshield washed (ok that’s a really old reference, but you get the point).

The point here is that while technology can be a great experience augmenter, it’s no substitute for building experiences based on the interactions of people. If you ask customers, they will tell you that that the brands they love and continue to be loyal to are the ones that deliver a great experience and a personal touch. And, by the way, they are willing to pay more for it if it’s exceptional. The good news is that so many organizations aren’t really focusing on or succeeding at making customer experiences a strategic differentiator. If the customer experience you are delivering looks more like the iPod model than the ‘album as art form” model, maybe it really is time to smash your iPod.

Today’s post was inspired by a series of interactions I had with VirginAmerica this week . Two lessons to be learned….

In one week, the family is headed to Southern California for a vacation. Although not as convenient and more expensive than flying out of Richmond, we decided (after standing up to considerable pressure from our daughter) to fly VirginAmerica from DC. Don’t tell her, but I’m looking forward to the experience.

Like all airlines, VirginAmerica has a rewards program. Theirs is called Elevate. Prior to purchasing our tickets in January, I joined the Elevate program. This past week, I received the following email from VirginAmerica:

Douglas,

You joined Elevate but have not flown us. That just won’t do. We want you to come and see what you’ve been missing, so here’s a special offer just for you – 30% off our lowest advertised fare on your flight with Virgin America.

Now I love a good deal and this clearly is one, but there’s a big problem here. You see, I already bought tickets to fly with them, and I might add, didn’t get the 30% discount, so why doesn’t their Marketing department know that??? Companies that deliver a truly exceptional customer experience, do so consistently at every touchpoint. My expectations for VirginAmerica have been set high based on feedback from other customers and their advertising. That e-mail sent the message that they aren’t aware I’ve already booked flights. That is not what I would expect from a company focused on a great customer experience.

Lesson #1: Take advantage of the rich customer information you have at every touchpoint. Don’t send a solicitation that says “Hey, when are you going to buy my stuff” if I already have!

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Twitter to the Rescue

Many companies have established a presence on Facebook and Twitter, but the ones that approach those communities as listeners and facilitators are the ones demonstrating that they get it. VirginAmerica (@VirginAmerica on Twitter) is one who gets it. This morning, I mentioned my frustration about the email experience in at “tweet” to Nick Schwartz, the guy behind the VirginAmerica Twitter presence. The response was almost immediate. He gave me his email address and asked me to send a note telling my story (in more than 140 characters), which I did. To be clear, I was not asking for nor did I have any expectations that my email would result in a fare reduction or other adjustment. I simply wanted to communicate an opportunity to inprove the customer experience. Nick passed my email up the chain and within an hour I got a reply from VirginAmerica Guest Care indicating they had forwarded my concerns to the marketing department.

I love the immediacy of being able to tap a company on the shoulder and start a conversation with out having to go to their place (i.e. website, 800#).

Lesson #2: If your company is participating in Social Media channels, take a lead from companies like VirginAmerica. Listen and Help first. The value that you deliver by doing that helps to strengthen your brand over time.

Seems like Facebook has been on a redesign binge lately and with every iteration, you can hear the increasing sound of users who are unhappy with the results. Last month, after Facebook’s redesigned Terms of Service debacle, Zuckerberg promised to be much more “democratic” about future changes. Of course that was last month and based on the track record, it’s just about time for an other customer “disruption”. In his latest move, following a failed attempt at acquiring Twitter, CEO Mark Zuckerberg decided to give Facebook users a very twitter-like, steady stream of updates. The problem is that the change is almost universally disliked, and that includes Facebook employees. Valleywag recently reported on the story based on an insider tip:

Zuckerberg sent an email to Facebook staff reacting to criticism of the changes: “He said something like ‘the most disruptive companies don’t listen to their customers.'” Another tipster who has seen the email says Zuckerberg implied that companies were “stupid” for “listening to their customers.”

There are only alleged statements, but if that’s a part of Facebook’s longterm strategy, then I think young Mr. Zuckerberg may face some problems down the road. Perhaps this thinking comes from the 24 year old’s lack of business experience . Maybe he feels that the people who place advertising on the site are the only “customers” he needs to listen to. Either way, I can think of no competitive business which has been successful in the long run without listening to its customers. If people stop liking your product, they will look for alternatives in the marketplace (just ask MySpace). When they start leaving, so will your advertisers. There’s probably a couple of college students sitting in a dorm room right now dreaming up the Facebook-killer.

Update: Robert Scoble has an interesting take on this over at Scoblizer. He makes a case in favor of Facebook ignoring the complaints in the interest of achieving a longer term objective. He says people will complain but they won’t leave. Perhaps not at this point. Too many people are joining facebook as their first foray into social media and are invested there. I would compare their position to where Twitter was when the Fail Whale was a common occurence. People didn’t leave because of the value and the investment there. Still, I think Scoble and I are looking at this from two very different perspectives. Perhaps Facebook is like mobile carriers. It’s market position allows them to grow despite doing things that customers dont like. Most competitive businesses cannot operate like that. Don’t use Facebook as your model.

Radio Shack is testing a new store model under the name PointMobl. The three test stores in the Dallas area focus on “mobile” categories ranging from compact laptops and MP3 players to smart phones and GPS systems.

The depth of selection is greater than what a typical RadioShack store carries and there is no reference to the parent company to be found anywhere in the store or on the PointMobl website which lists the copyright owner as being “PointMobl Corporation”.

That last point is a very smart move which clearly shows Radio Shack understands where the brand sits in the minds of their target PointMobl customer. I’m making an assumption here that they are trying to appeal to upscale, tech-savvy customers in the 18 – 35 year old range based on the store description and the images shown on the website. Taking this “anonymous” approach removes one barrier to acceptance by those target customers. On the other hand, the way they pitch the concept on the website sounds like the typical safe, boring nonsense that I sometimes hear coming from corporate marketing departments trying to appeal to a much broader and older segment:

“It’s time to let your mobile life out to play. Give your productivity a power-up, stay connected, and take your inner rockstar on a world tour. It’s time for a true mobile outfitter. One who really listens to your needs, then leads you to the right solution.”

Blech! If you are 18 – 35, chances are you are already leading a “mobile life”, you are always connected, and when it comes to figuring out what gear you need, you do your own research because experience has shown that you usually understand the technology and the options better than the salespeople. The rest of the copy on the site doesn’t get much better. I should also point out that the website has at least one typographical error where they proclaim “You don’t need another mobile store – you need a good listenter“. Come on guys, any spellchecker program would have found that.

Some analysts have expressed concern about testing new store concepts under the current economic conditions. I think Radio Shack has no choice but to explore alternatives given that a third of their existing store revenue comes from mobile sales and that business is being eroded by the likes of Best Buy who has opened their own chain of mobile specialty stores and expanded the mobile departments in over 900 of their superstores. Radio Shack is also losing business to the mobile carriers which continue to pop up like weeds in every stripmall nationwide. RadioShack has 6,000 company-operated and franchise stores and 700 wireless phone kiosks. That gives them easy access to real estate that would be retrofitted into PointMobl outlets. A slideshow of images from one of the test stores is available on YouTube:

This approach could end up generating higher revenue per square foot than existing Radio Shack stores. I’m fairly certain that is one of the test criteria and if the test proves this out, an expansion of the PointMobl concept could boost the chains revenue for a few years. While that idea seems appealing, I don’t see it is a differentiated strategy that can be defended over the long term. There’s nothing special here.

Store Aesthetics

The stores are described has being “upscale” with white fixtures and clean glass, but based on the following slide show, the interior of the store doesn’t generate that Apple store feel that I’m sure they were going for. Instead it looks cramped and dark. In some places, the dramatic lighting makes it seem almost museum-like; not the kind of feel that invites you to pick up the stuff and interact with it.

The Competition

The mobile carriers all have significant presence in this size footprint and it would be extremely easy for them to expand their product offerings to include a similar product mix. The only real differentiation here might be in the ability to offer multiple mobile carriers in one store, but that’s not unique either considering Best Buy’s strong position in the market and the growing presence of mass merchants like Walmart and Target in the mobile space.

In order for PointMobl to really be sustainable, it must be able to offer the customer an experience that no one else can. I just don’t see that happening with categories that are already commodities.

As the popularity of Social Media has risen over the last couple of years, so has the assertion from some “experts” looking to sell their “expertise” that organizations must start using these tools or be left in the dust. Of course, real value of Social Media has been much more difficult to demonstrate using traditional ROI approaches and, as with most emerging technologies, once touted concepts as Corporate Blogs, Public Virtual Worlds and the universal catch-all term “Web2.0″ find themselves smack dab in the Trough of Disillusionment. Newer technological innovations like Microblogging Platforms (eg. Twitter) can also be found in Gartner’s 2008 Hype Cycle. As they are newer on the scene, they appear to be around the “Peak of Inflated Expectations”. If you’ve spent any time listening to the Social Media “guru’s” on Twitter, you’ll probably agree with that assessment which means the Trough of Disillusionment can’t be far behind.

Companies are flocking to Twitter to “engage with their customers”, often with the same mixed or difficult to demonstrate results as with earlier attempts. A Social Media strategy is not going to be effective for every organization and many simply don’t understand how to approach it. One area that seems to be a natural fit for these communities is Social Causes.

Perhaps it’s a perfect storm of changing attitudes and technology adoption, but it seems to me that there have been some very newsworthy examples of people helping people through Social Media in the last few months.

Domestic Diva pleaded for help in finding a kidney doner for her daughter and received an enormous response from her community.

This week, over 180 cities around the world will host Twestival events to raise money for charity:water

Some of these have been focused on a single individual or family while others are much broader in scope. Either way, they have succeeded by leveraging relationships between real people and that seem like the biggest takeaway for other organizations. Just as these communities are coming together to help others, the degree to which you show your “Social Generosity” will be the biggest factor in how your organization is is embraced by these social communities.

What does failure mean to you? Chances are the first thing you think of isn’t good. Standard definitions of failure include “omission of occurrence or performance” and “a lack of success”. Great twentieth failures include disasters like the space shuttle Challenger, Chernobyl and the Titanic. Lately, the expression “FAIL” has increasingly become the way to sum up almost any bad situation in a single syllable (an epic fail in my opinion).

In many corners of the business world, failure is not rewarded or encouraged. Failure can be expensive and if not managed, can damage a company’s reputation. It doesn’t support the short term, high performance expectations of the average publicly traded company. Of course, if you are an above average organization; one that has established a reputation as an innovative leader, failure is likely a valuable and necessary component of your continued success.

To most people, the name “Honda” probably suggests “cars”, but at it’s core, Honda is an engine company. Their engines drive cars, motorcycles, lawn equipment, watercraft, and jets (yes jets). They are also the only provider of engines to the Indy Racing League, but that honor was only achieved through some spectacular failures. Honda is one of those innovative companies that understands the importance of failing and learning from it. It’s baked into their culture. This company-produced film gives us an open and honest look at some failures from Honda drivers, designers and engineers and how they draw upon failure to motivate them to succeed.

Ben Yoskovitz wrote an interesting post this week entitled “You Can’t Build Authority and Thought Leadership via Twitter”.He made a good case for the idea that microblogging platforms like Twitter are great for transient stuff, but cannot replace a blog for developing “authority” through in-depth, focused opinions and subject matter knowledge.He also pointed out that no one has established themselves as authority on any subject strictly through their activity in Twitter, but that it is a great tool for expanding your audience.

As an example of that last point, I found Ben’s post through Twitter.There was a discussion going on there regarding his post which evolved into a question about where communities start. That got me thinking about how and were online communities develop.

Communities can develop around all kinds of social platforms. Those communities have notable differences which I think are due in large part to the nature of the platform. Ben says if you are looking to be a thought leader/authority then you need a blog. But what if you are an organization looking to engage a community (or build your own) using social media? Is is a blog the best place to start or is there a sharper tool in the social media shed? Let’s take a look.

Forums

Long before blogging became popular, online forums and chatrooms provided the foundations for “virtual town halls”. Forums are still widely used as a vehicle for supporting discussions regarding certain products (Macbook, cars, gaming). Forum content is typically moderated and limited to specific topics. A forum Moderator is responsible for ensuring that the forum’s content is appropriately organized and on topic. Online forums are much like conferences. They offer subject matter experts sharing their opinions and knowledge of specific topics with attendees who have questions and want to learn. Conferences typically offer a number of topical sessions which are often moderated.

Are forums the right place for you to engage. Perhaps. If your objective is to provide assistance regarding your products or services, engaging in forums may be a good approach. The downside is that forums don’t generally have the traffic or reach of social platforms like Twitter or Facebook. Some organizations have been successful creating forums within their website to assist in product support.

Blogs

In recent years, well known bloggers have developed dedicated audiences who visit and comment on the blog regularly. Of course, very few bloggers ever rise to this level. The internet is a very big place and a blog is like little cabin out in the woods. You better have some amazing stories to tell on your front porch if you are looking to attract and build a community on your property.

Is creating a blog the best way for an organization to engage a community. Many have tried it, but my personal opinion is that corporate blogs are generally boring and offer very little for the community they are trying to engage, therefore there is usually not a compelling reason for people to travel down the dirt road to your cabin in the woods.

Personals

If blogs are like cabins, then “personals” sites like MySpace, Facebook and LinkedIn are like large residential developments. Lots of people have houses there but only your trusted friends and neighbors know where you hide the key. Like in a physical neighborhood, you meet new people through your neighbors and through social associations and events.

There are many more Personals sites than the three mentioned above and even they have significant differences. MySpace never had much appeal to adults and appears to be losing favor with Millenials as well; however it does have a strong music-oriented component. If you are a musician/band looking to build a community, it’s a pretty good place to start.

LinkedIn is clearly oriented to professional networking. Using the groups feature, you can establish and engage with communities, but I sense that most people who have LinkedIn profiles don’t spent a lot of time interacting there.

Facebook has evolved into much more of an application platform than the other two. Companies have leveraged this capability to create Facebook applications that can be useful (or not). The trick with Facebook is finding your target community and then getting them to use your application and share it with others. Simply setting up a Facebook page because it’s the latest corporate trend is not going to provide any value to you or your customers.

In all of these cases, the reach potential is great because they have very large populations. On the other hand, you are dealing with platforms that require some sort of acceptance on the part of the “residents” before you can interact with them which may be a barrier for your organization. If you want to engage the people in this neighborhood, you better be offering something of value or they won’t be answering the door.

Microblogging

There are many emerging platforms that follow this model, but the king of the hill is Twitter. Twitter is a village festival. Everyone is in the street, talking, sharing, showing off their wares (blog posts, presentations, subject matter expertise). There are people (lots of them) providing entertainment, news, advice. It’s vibrant, alive, growing and you don’t need permission to come in. People will listen to you (and tell others about you) if you have interesting things to say. They will just as easily ignore you if you are annoying. For companies, Twitter is a great place to just sit back and listen for a while to see what people are saying. They are talking about their lives, their families, their friends and their jobs. If you are in business, chances are someone is talking about the the stuff you are selling, or they may be talking about YOU!

Would it make sense to engage communities like those on Twitter? Absolutely, BUT you must do so in a way that adds value.

Does that mean telling people to go read your corporate blog? NO!

Does that mean pitching your junk in 140 characters or less? NO!

Does that mean listening first and offering ideas and solutions to help people get something done? YES!

Does that mean helping people in the community connect with others who have similar interests? YES!

There are certainly other social platforms out there and there will be more in the near future that we haven’t even thought of yet. Ben’s post said you can’t build authority on Twitter and he may be right, but I know of no better platform to build community engagement. Participation in social media continues to grow and organizations will find creative ways to engage with their customers there. Will you be one of them?

“Tennis is a ridiculously hard game, and there are a relative few who can, in the real world, reach pro status. Few of us can do much of anything well enough to attract real acclaim. But it’s a blast to try. And it’s even more fun to feel some pleasure of success from your efforts. To forget–even for a few foolish minutes–that you aren’t an uncoordinated undesirable left standing on the sidelines. That, instead, you are gifted. Talented. A winner on the court. The kind of person the captain picks first for the team.”

If you’ve played Wii Sports, you understand this and it got me thinking about why some experiences can trigger very passionate responses in people. Videogame designers have has evolved the medium from relatively simple (albeit fun) arcade style formats to realistic 3D-like environments with genres that appeal to sports enthusiasts, pilot wannabes and fantasy/role players. The Wii’s interactive controller design takes that to a new level allowing the player to use physical movements to control the game. This immersive experience puts the player on the court, field, fairway or in the case of the wildly successful Guitar Hero series, on the stage.

The question is whether or not these simulated experiences can motivate some players to try the real thing.

Beyond the numerous debates regarding the level of exercise a person gets playing Wii Sports, I haven’t seen any reports suggesting a game-inspired sporting goods sales surge, but Guitar Hero appears to be an altogether different tune.

Since its introduction on Playstation 2 in November 2005, Guitar Hero has spawned its own culture of fans and fanatics. Just check out the number of Guitar Hero videos on YouTube. The Guitar Hero series has been financially lucrative for Activision, the company behind the games. In April, 2008, Wired magazine reported that the franchise had sold 14 million units which equates to about US$1 billion in sales. Sensing an opportunity to tap into the passions of music enthusiasts following the initial launch of the game, music instrument retailer Guitar Center partnered with Activision to be the in-game virtual music store starting with Guitar Hero II. It appears their instincts were right as the musical instrument retailing industry has seen record year over year competitive store increases since the game was first introduced.

Guitar Center recently conducted a survey which “confirmed that the majority of those who play the games are more interested in picking up real instruments, it also revealed that most musicians who play the games use their real instruments more frequently as a result.”

Guitar Center’s move encouraged others in the music business to get their products into the game (literally). The latest versions of Guitar Hero are music marketing masterpieces with product placements by everything from bands to music publications and beyond. On a basic level, there is embedded advertising for products from leading manufacturers like Gibson, Mackie and JBL. These product and logo placements are both passive (a logo on the stage monitor) or active (play a Les Paul guitar). Beyond the direct music tie-ins are lifestyle placements from brands like Axe and Pontiac, and music publications like Guitar Player and Kerrang. From a content perspective, record labels have replaced the cover versions found on the original game with the real artist recordings. Players are exposed to new and “new to you” music. The more you play, the more new stuff you hear and you are more likely to listen to a song that you might otherwise turn off because you are interacting with it. The results are impressive:

Sales of gear for first-timers at Guitar Center has surged. In the holiday selling season in the last quarter of 2007, Guitar Center saw a +20.7% jump in comparable store sales for beginner-level electric guitar & amplifiers. This surge grew even stronger through the first nine months of 2008, when Guitar Center’s cumulative comparable store sales for the category increased +26.9%.”

Gibson said that it had seen sales on the rise, particularly those that are featured in the video games such as the iconic Les Paul guitar.

So at its core, what is it about Guitar Hero that allows it to not only be a great piece of entertainment but also an effective marketing vehicle and an inspiration for some to take up real guitars?

It’s all about appealing to a lifestyle. Like the way Harley Davidson has figured out how to be a lifestyle company, Guitar Hero resonates with rock music Passionistasbecause it taps into that inner rockstar that so many have wanted to be at some point in their lives. It works because it gives players a taste of an experience that they want in a way that lets them forget–even for a few foolish minutes–that they can be more than just a fan in the audience. That, instead, you are gifted. Talented. A rocker on the stage. The kind of person who gets their face on the cover of Rolling Stone.

Do you have Passionistas as customers? Are you helping them to tap into their inner rockstar?

A few months back, Steve “aggregator-in-chief” Woodruff started a daily blog series called “Five in the Morning”. Through the series, Steve shares recent posts and news items from his feed reader that he finds interesting. Wednesday night, Steve and I got together to talk shop and to enjoy some award-winning, Bobby Flay-slaying BBQ ribs. Somewhere between the 13th and 17th napkin, Steve mentioned that he wanted to franchise the Five in the Morning series to cast a wider net around the great content available out there. When he asked if I wanted to give it a shot this week, I said sure.

So without further adieu, here are five posts that I think you’ll find interesting….

Forrester’s Bruce Temkin discusses the just released 2008 Customer Experience Index. As usual, industries with the least amount of competition clock in with the lowest customer experience scores. That includes Comcast whose overall index dropped a whopping 12 points since last year despite its ComcastCares efforts. Also, the post includes a link where you can download the complete Forrester report for free.

The guys over at MyCreativeTeam explain why an old burglar with a reindeer fetish has such a strong brand.

Social media consultant Matt J McDonald tells us that “Blogging is hard work” plus 15 other Simple Social Media Truths. By the way, some believe Matt and American Idol David Cook were Separated at Birth (Go ahead, click the link. You know you want to).

Crayonista Adam Broitman outlines three creative interactive marketing strategies that invoke consumers to talk to other consumers about brands, with minimal interference from the brand itself. Note: the post starts on Adam’s blog but continues at iMediaConnection.

Last but not least, Amber Naslund picks up on posts from a few other bloggers and makes a great case for looking at old tools through new lenses.

“The only important thing is that we make the children happy”. It’s one of the most memorable lines from the 1947 classic, “Miracle on 34th Street”. Replace “children” with “customers”, it is also an idea that has unfortunately faded from the fabric of American retail. In the film, the Macy’s Store Santa makes that important point to an incredulous mom after telling her that she could get the fire engine her son wanted at a competitor. Mom couldn’t believe that Macy’s would send customers to another store.

Fast forward to today and imagine Macy’s or just about any other retailer helping a customer find the thing they are looking for by pointing to a competitor. It might occasionally happen, but it’s certainly not Standard Operating Procedure. To do so would reflect badly on the store’s merchants and send business to the enemy, right? The retail would much rather send a customer away unhappy than send them to a competitor. But perhaps the retailer’s perspective is different from the customer’s? Perhaps in the customer’s eyes, helping them find what they were looking for, at a competitor no less, was an unexpected “surprise and delight“. Might that not earn a few loyalty points?

A few years ago, a major consumer electronics retailer was testing various innovation ideas in the Boston area. One of those ideas was to place a “concierge” near the store entrance with the objective of improving close rate. The job had two roles:

Greet people coming in and direct them to destinations in the store. This wasn’t just directing customer to “go to Aisle 5″. The concierge was trained to engage the customer to learn why they had come to the store. If “assisted selling” was involved (e.g. HDTVs, digital services), they would escort the customer to that part of the store and introduce them to a salesperson.

Engage people on the way out. If they had made a purchase, thank them. If not, ask to assist in locating the item. The concierge desk had a couple of internet terminals and the concierge would help the customer find the product they wanted on the retailer’s website. They were also instructed to help the customer search for other retailers who might carry the product if they didn’t carry it!

The concierge idea was only tested for couple of months and in that time, the close rate improved, but not enough to offset the cost of the position. With that being the company’s determining success metric, the idea wass killed. The test also included a survey of customers to get their feedback on the experience and the results were impressive. Roughly 85% of the 1200 customers surveyed felt that the concierge improved their shopping experience and, more importantly, The same percentage said they were likely to recommend the retailer to friends based on their interaction with the concierge.

While the test did not generate the targeted close rate numbers during the 60 days it was operational, customers really liked it. If the company had run the test for 6 months or a year, would the close rate improved? Who knows, but I’d argue that the improved customer experience in those stores would have resulted in higher traffic over time and that’s every bit as important as close rate.

So why are retailers so focused on the transaction and not the experience? Because it’s the fastest thing they can measure. Unfortunately, a change in the experience may not lead to improved business in a 60 day time frame and most retailers don’t have the patience or the confidence to invest in an improved experience for the long haul. Paradoxically, failure to make customer experience improvements may prove to be the downfall of a many retailers in the next few years.

An “Open Organizational Culture” is necessary to drive employee engagement.

So what exactly is an Open Organizational Culture? Fundamentally, it’s one that fosters transparency and accountability to its employees, customers and the public. This is in contrast to traditional organizations that operate in a hierarchical model with an authoritarian culture that seems to foster privacy or secrecy.

An Open Organizational Culture has several unique characteristics:

Transparency and Open Communications

Leaders of high performance organizations nurture a culture that allows for people to question openly and have honest dialogue. They create a climate of candor throughout the organization. They remove the organizational barriers — and the fear — that cause people to keep bad news from the boss. They understand that those closest to customers usually have the solutions but can do little unless the organization encourages open discussions about problems. When people can raise objections when when necessary (and without reprisal), it paves the way to higher engagement.

Values

In an Open Organization, the leader’s beliefs and values create the direction and the boundaries that people need to perform well. The values are clearly defined & communicated, and reviewed periodically for relevance. More importantly, the organizations practices, systems & processes are clearly aligned with the values and management ensures that employees’ day to day experiences are consistent with the values. You can quickly identify an organization that does not adhere to its stated values by gauging the level of cynicism amongst the staff. Open Organizations really walk the talk and it is reflected in their employees’ attitudes.

Empowerment in Organizational Culture

In “Good to Great” (2001) Jim Collins asserts, “good-to-great companies built a consistent system with clear constraints , but they also gave people freedom and responsibility within the framework of that system.” Open Organizations not only actively engage members of the workforce, they rely upon their contributions to on-going improvement. Driving Empowerment and responsibility down to the lowest appropriate levels within the organization, especially to the customer-facing members, has many benefits:

It provides employees the opportunities and incentives to shape the company experience. Encouraging involvement in this way fosters a feeling of ownership on the part of employees.

It promotes organizational creativity which leads to innovation. As I stated above, customer facing associates are typically the ones with the best insights regarding the customer.

It allows decisions to be made without unnecessary or authoritarian approval process which can lead to a more responsive organization.

Encourage continuous learning which in turn improves decision making.

So in summary, an organization’s culture is shaped by and reflects the values, beliefs, and norms held by its founders, leaders, and organizational members. In Open Organizations, values are aligned and honored, transparency and open communication are the norm and decision-making is informed by a process of continual learning. Cultures that embody these characteristics demonstrate them in the organization’s structures, standards, policies, and systems. They shape the work environment, staffing practices, and organizational performance, all of which influence the employee experience and by extension, the customers they serve.

If this sounds like your organization, great. I’d love to hear about it. If not, I’m curious about that things you see are barriers to getting to an Open Organization.

With the economic downturn taking a toll on retailers one has to wonder what is going the be the differentiating factor for the survivors. With people spending less across all retail channels, I heard a pundit on a financial network say last week that retailers were going to focus on taking market share away from competitors. That sound good on paper but how exactly does one do that.

The vast majority of retailers will be going for the wallet with margin-crushing discounts and deals. While this may be good for customers (clearly a buyer’s market), it will not be sustainable unless you are a retailer with deep pockets and those are few and far between. The other approach would be for a retailer to leverage their experiential benefits. Unfortunately, this approach is not something you can just whip up in time for the holidays. If you have not been growing your customer base through great experiences, you are not going to be able to take this approach this time around. That said, you may want to consider making changes now.

In retail, the experience your customers receive is a reflection of your organization’s culture. An open culture that encourages, rewards and acts upon bottom-up and outside-in feedback is one that fosters engagement at all levels. Engagement with the organization by your customer-facing people leads to engagement with the customer and that lays the groundwork for delivering great experiences.

I don’t mean to over simplify the idea of an open culture. If your organization isn’t structured this way, you can simply mandate it. Getting there requires real leadership, considerable effort and a willingness and ability to dedicate resources to the goal.

As the title suggests, I’m planning a series of posts on this topic. In my next post, I’ll offer some suggestions on how to build an Open Culture and how to leverage it once you get there.

The Age of Conversation 2 has just launched and is available for purchase in hard cover, paperback and e-book here, with all proceeds going to Variety, the international childrens charity (Age of Conversation 1 raised over $15,000 so that’s the target to beat). Once again, Drew McClellan and Gavin Heaton have fired up an international team of 237 marketing bloggers to create the sequel to last year’s experiment. The passion and effort they have put into bringing this idea to life is inspiring and I can’t wait to get my hands on my copy (hard cover, of course).

Age of Conversation 2 is about the power of sharing ideas through new media, but with more than double the number of writers as last year’s book, Drew and Gavin decided to break this one into nine sections. My chapter entitled “The Digital Playground”, is part of the “Life in the Conversation Lane” and discusses the impact that millenials are going to have on society.

I started my professional career as a programmer with Circuit City in 1985 and I remember vividly how very cool a place it was to work. Not only were you part of a company that sold a cool product, but the organization treated people like family. On top of that, consumer electronics retailing was a specialty back then and Circuit City was the king of the mountain. There were many reasons for their dominance but the biggest was that for all intents and purposes, it was still a family business and the values that founders Sam Wurtzel and Alan Hecht built the business on were ingrained in the culture.

I’ll digress for a minute to share some very early Circuit City trivia as a way to convey how savvy a businessman Sam Wurtzel was. Bear with me, there is a reason for this detour. It was the summer of 1948 and Sam was driving his family to Florida for a vacation. Coming through Richmond, VA, Sam saw a billboard announcing that WTVR – “The South’s First Television Station” was on the air. Sam figured that with a TV station here, Richmonders were going to need a TV store. With that as his business idea, Sam rented out a corner of a Sears tire store and went into business selling TV’s door to door. The concept of Tryvertising has been talked about in recent years, but it’s basically how Sam approached selling TVs. He would deliver the TV on Tuesday and let customers keep it for a week to try it out, which of course meant that they got to see NBC’s hit Texaco Theater with Milton Berle on Tuesday nights. The following Tuesday, Sam was to pick up the TV, but not wanting to miss that evening’s Milton Berle show, most customers decided to purchase it instead. Simple idea, brilliant approach!

Sam and Al developed the WARDS TV business during the 1950’s. The “W” stood for Wurtzel and the “ARDS” were Sam’s kids’ initials. During the next three decades, several other store formats were experimented with. The name change accompanied a regional expansion and public stock offering in the 1980s. All along the way, Wurtzel, and later his son, Alan, built the business on the the 4-S Model: Service, Selection, Savings & Satisfaction, which was credited in Jim Collins’ 2001 classic “Good to Great” as the differentiator that allowed Circuit City shares to perform 18.5 better than the market between 1982 and 1997.

The 4-S model was the customer lens through which every “associate” viewed their work. Whether developing software or working on the sales floor, everything you did was about delivering those four S’s to the customer. Earlier this week, The Consumerist posted a video compilation of old Circuit City TV spots from the company’s heyday years of the late 80s and early 90s. The messages in these spots rang true then, but sound like empty promises a decade after the 4-S model was abandoned and management stopped focusing on what mattered – The Customer. The results speak for themselves. With a stock price now around $0.28 (yes, that’s 28 cents!) and likely to follow CompUSA into retail oblivion, it’s sad to think about how the leaders of this company were able to destroy it in just ten short years. The comments on The Consumerist post tell the story of how the brand is perceived today.

Take a walk down memory lane (if you’re old enough), and remember that you brand is not what you say it is, but rather what your customers say based on their experience with you.

The second Age of Conversation volume features chapters from 237 authors in 15 countries. My contribution explores how social interaction on the web comes naturally to millenials. As with the original Age of Conversation, all proceeds benefit Variety.